BBNI released its bank-only Feb-25 results. Given that February is shorter than other months, the typical monthly interest income or expenses for Feb tend to be lower (assuming there are no changes in interest rates) than other months. In this note, we look at YTD Feb-25 bank-only results, which overall demonstrated decent operating results despite still challenging macroeconomic trends. Post results, we reiterate our Buy rating on the stock with a target price of IDR6,250.

Bank-only Feb-25 results summary

In Feb 25, BBNI’s net interest income (NII) stood at IDR2.9tn (-8% m-m; +2% y-y), with gross interest income at IDR5.0tn (-9% m-m; +2% y-y), and gross interest expenses at IDR2.1tn (-9% m-m; +2% y-y). This brought YTD Feb-25 NII to IDR6.1tn (+2% y-y). Meanwhile, pre-provisioning operating profit . (PPOP_ remained relatively flat at IDR2.4tn (-2% m-m; +1% y-y) in Feb 25, bringing YTD Feb-25 PPOP to IDR4.9tn (+1% y-y). In Feb 25, BBNI booked lower credit costs (CoC) of IDR0.5tn (implying 70bp vs 100bp in Feb 24). This brings YTD Feb-25 CoC to IDR1.0tn (-20% y-y) – implying YTD CoC of 80bp (-30bp y-y). As a result,BBNI’s implied YTD net interest margin (NIM) and risk-adj NIM stood at 3.6% (-10bp y-y) and 3.1% (+10bp y-y), respectively. So far, we have not seen a meaningful rise in asset yields despite still relatively tight liquidity in the banking system. BBNI’s bank-only Feb-25 net profit reached IDR1.7tn (+2% m-m; +7% y-y), bringing YTD Feb-25 net profit to IDR3.3tn (+8% y-y). Overall, the implied balance sheet ROAA stood at 1.9%, with balance sheet ROAE at 12.4%.

On the balance sheet, BBNI booked loan growth of +10% y-y (-3% YTD) in Feb-25 while deposits remained relatively flat +1% y-y (-2% YTD). The decline was  mostly due to the decline in Current Account (CA) -3% y-y / -1% YTD, which resulted in a CASA ratio of 70.9% and LDR of 95.7% (vs 87.8% a year ago or 96.0% Dec-24). Loan-Loss-Reserve (LLR) stood at 5.2% (-170bp y-y / +20bp YTD). This suggests stability in LLR, in part due to declined loans on a YTD basis, and thus an improved earnings profile for the bank (i.e. it does not have to rely on a lower LLR to boost profits).

Valuation and risks

We derive our TP of IDR6,250 based on a DuPont analysis, assuming a risk-free rate of 6.5%, an equity risk premium of 7.8%, growth rate of 8.5%, beta of 1.0x and a CAR-adjusted ROAE of 16.5% (all remain unchanged). We also use 2025F book value as a reference. Our TP implied implies a 2025F P/B of 1.3x and a 2025F P/E of 10.6x, compared to its current trading multiples of 1.0x and 8.1x, respectively. Key downside risks to our view include worsening macroeconomic trends, unfavorable regulatory changes, increased competition for liquidity (which would increase funding costs), worsening credit quality (which would raise credit costs) and higher opex.

Fig. 3: BBNI - Margin trend %

Fig. 4: BBNI yield vs growth trends %

Fig. 5: BBNI LLR vs 12MMA WO %

Fig. 6: BBNI 12MMA CoC vs 12MMA WO%

INVESTMENT RATINGS
A rating of ‘Buy’, indicates that the analyst expects the stock to outperform the Benchmark over the next 12 months. A rating of ‘Neutral’, indicates that the analyst expects the stock to perform in line with the Benchmark over the next 12 months. A rating of ‘Reduce’, indicates that the analyst expects the stock to underperform the Benchmark over the next 12 months. A rating of ‘Suspended’, indicates that the rating, target price, and estimates have been suspended temporarily to comply with applicable regulations and/or firm policies. Securities and/or companies that are labelled as ‘Not Rated’ or ‘No Rating’ are not in regular research coverage. Benchmark is Indonesia Composite Index (‘IDX Composite’). A ‘Target Price’, if discussed, indicates the analyst’s forecast for the share price with a 12-month time horizon, reflecting in part of the analyst’s estimates for the company’s earnings, and may be impeded by general market and macroeconomic trends, and by other risks related to the company or the market in general. 

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Erwin Wijaya (erwin.wijaya@verdhana.id)